Canada stocks surge on miners, RIM rally

LauraMandaro

SAN FRANCISCO (MarketWatch) — Canadian stocks rallied Tuesday, adding to monthly gains, as miners climbed to higher ground on investor demand for precious metals as a hedge against Europe’s debt struggles.

The Canadian currency, however, slid after a report on the country’s gross domestic product showed the economy slowing in the third quarter, relieving pressure from policy makers to raise rates again.

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Toronto’s S&P/TSX Composite index ($ISPTX) closed up 57 points, or 0.4%, at 12,953 as metals and mining stocks led. The index is up 2.2% for November.

Gold for February delivery settled 1.4%, or $18.60, higher at $1,386.10 an ounce on the Comex division of the New York Mercantile Exchange. Investors favored gold as European sovereign-debt fears continued to roil the markets, driving up yields on Spanish bonds and depressing the euro. Read Metals Stocks for more on gold futures.

Other metals rallied as macroeconomic data out of the U.S. was positive. Silver got bids both for its safe-haven, precious metals appeal and for its industrial usage, and closed up 3.8%.(RMX)

Canadian shares of Research In Motion Ltd. (RIM)
RIMM
jumped 5.4%, helped by an upgrade to buy from Jefferies & Co. on a positive assessment of the BlackBerry-maker’s new operating system. Read more on Research in Motion’s upgrade.

Statistics Canada said Tuesday that real gross domestic product rose 0.3% in the third quarter, muted by a drop in exports and lower investment in housing, and cooler than the 0.6% gain in the prior quarter.

Annualized, real GDP grew 1% in the third quarter, slower than the U.S. real GDP rate of 2.5%.

Analysts said the growth slowdown should halt future rate hikes by the Bank of Canada, whose three interest-rate increases this year have supported investor demand for the loonie.

“Monetary policy will be kept on hold at the December policy meeting and well into next year too,” wrote Michael Taylor, an analyst at Lombard Street Research.

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